Copyright Boss Thinks It's Possible To 'Starve' Infringement Sites

from the good-luck-with-that dept

Isn't there a term for doing the same thing over and over again and expecting different results? In a Congressional hearing that was more for show in preparation of a new push for the COICA censorship bill, the acting Register of Copyrights, Maria Pallante, told the hearing that the way to stop foreign websites that link to infringing content is to "starve" their revenue, by having credit card companies cut them off and having advertisers not be allowed to run ads on their sites (things found in COICA, of course). Amusingly, her claims come just a few days after a massively detailed research report suggested exactly the opposite was true. Not like one would expect the Register of Copyrights to actually pay attention to what the research says, I guess.

Furthermore, Pallante's argument makes no sense for a variety of reasons. First, as we've pointed out repeatedly -- including to many entertainment industry officials directly: if these sites are really making so much money, why not start your own sites? Surely people would prefer to get the content from legitimate sources. All these sites are really doing is highlighting how the industry has failed to serve a consumer need. Second, for well over a decade, we've seen that the vast majority of unauthorized file sharing is done for entirely non-commercial reasons. You'd have to have not been paying attention at all to think that everyone setting up these sites is doing it for the money. Third, the idea that these sites would just go away if you blocked payment from these sources is again laughable. Every time these sites are taken down or blocked in some manner, they or other similar sites pop right back up. Continuing to pretend you can stop them, rather than trying to compete with them, simply doesn't work.

At the same hearing, Paramount's COO apparently did his usual song-and-dance where he showed how searching for stuff on Google could lead you to infringing material. He and another speaker, Daniel Castro, of ITIF, both suggested that censorship without prior adversarial hearings was not a problem. Sure, it's not a problem for the businesses they represent. It is a problem if you believe in the fundamental tenets of the Constitution, of course. Castro went to ridiculous extremes, suggesting that the government needs to blatantly censor the web through a "blacklist" filter that ISPs and search engines would be required to block. Anyone who thinks that won't be abused hasn't been paying attention. Thankfully, at least a couple of Congressional reps -- Zoe Lofgren and Mel Watts -- found these proposals extremely troubling. Unfortunately, many others on the panel are just itching to move forward with COICA, anyway. So, expect this fight to move on along similar lines. Hopefully enough of our elected officials recognize that there are existing ways to deal with infringement, and blatant censorship without serious due process is not even close to the right way to handle these things.

It's really amazing, in this day and age, that some of our elected officials honestly seem to think censorship is the answer to anything.

Reader Comments

There's an answer.

"if these sites are really making so much money, why not start your own sites?"
I'll tell you why: because they can't. Every time a site gets started, it fails because it's laden with ads (remember those things you said were content?) Again, it doesn't matter if the ad is good. If it's embedded into other content, it's a major turn off to people.

Illicit sites don't embed ads into the content. That's why it's so much more alluring to acquire. No previews. No FBI warnings. No sob stories requiring the use of Rogaine.

Just content.

There's this belief that in order to give content to an audience, someone has to pay for the delivery through intrusive ads.

Let's take a look at a few examples: Hulu, AnimeNewsNetwork, Crunchyroll. Each has ads within the content and each wonders why people still go elsewhere to get their content.

Until those who build these sites wrap advertising around the content, just as pirate sites do, this battle of copyright will never, ever end.

Perhaps Nina make a comic to drive home the point content delivered on the internet should not be delivered in the same manner as it was on a medium now threatened by the internet called "television".

Techdirt has been reporting on the woes of copyright for how long? Yet not a single change has been done for the good.

Not. A. Single. Change.

COICA will pass. ACTA will get more support. "IP" is the new buzzword because it encompasses so much to a multi-billion dollar industry.

And all this started because somewhere, someone decided they didn't get their "fair share" of the profits made by something they worked on.

Stay classy, copyright. For without you, I'd never have the privilege of breaking several sections in the same law while trying to watch a legally paid for DVD which doesn't play in my latest player (because I don't want to update the firmware) so I have to pirate it so my 8 friends can enjoy it on a 60" LED LCD wrapped with 7.1 surround sound.

Just wanted to chime in, that I've paid for a years membership to Megaupload, cost me 60 euro.
Now, according the copyright people, I'm a free-tard, just wanting to get the content for free. Yet, here I am handing over hard earned cash. I spent it because then I can get the content I want faster, easier and it stays on my hard drive. I don't have to deal with DRM, if I want to put it on another device I can and will. I don't care if the money doesn't go to the creators.
This is what I, the consumer, wants. I want unlimited access to the files I download. I paid money for an easier method of getting them. Instead of 60 euros going on maybe, one or two series, I have unlimited content, at least for a year. Perhaps the copyright people can do something similar? No, not iTunes, I refuse to even look at anything related to Steve Jobs.

Re:

It works because megaupload isn't paying to use any of the content. Your 60 euros goes to pay for servers, bandwidth, and of course, Kimber's amusing lifestyle. If they actually had to pay for all that unlimited content you are enjoying, you would be paying many times more for the same service.

It's hard to compare sites that don't have any product cost with sites that do actually pay for their content.

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To turn your statement around, legal sites don't work because content owners price their works way over what the market will actual bear. It's hard to compete when you don't believe the market sets the price.

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No, it's hard to compete when your competitor can undercut you. Remember, not all of that money given to the content creator is spent on cocaine and whores. A great deal of it actually goes to pay for food and support families of the writers, actors, directors, gaffers, lighting techs, etc. But megaupload doesn't have to worry about those costs. So of course it seems cheaper.

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No, it's hard to compete when your competitor can undercut you. Remember, not all of that money given to the content creator is spent on cocaine and whores. A great deal of it actually goes to pay for food and support families of the writers, actors, directors, gaffers, lighting techs, etc. But megaupload doesn't have to worry about those costs. So of course it seems cheaper.

What you really mean is that Megaupload isn't a legacy business grown fat on years of monopoly pricing. The fact is that content only costs so much to create because you want it to since it justifies higher profits. In the past, you could get away with it because you operated as a monopoly cartel (funny how media always seemed to come in at certain fixed price points - wonder why that happened).

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Monopoly pricing? Where? Maybe on the old television networks when there were only three, but three isn't a monopoly and that ended years ago. Cable? That was close to true for a time, but now the satellite TV providers and the phone companies often compete and compete well.

Or perhaps you mean movie theaters? But wait, there have always been a number of theaters in my town and some of them were second run theaters that offered a discount for those that would wait. Even the first run shops were separated from the movie studios several generations ago.

Do you mean the news business? Even in today's one paper towns, the newsstands almost always have USA Today, the WSJ, the New York Times and a few others right along side the local so-called monopoly.

Do you mean music? There were always four or five big record companies but there were hundreds of independent labels even during the years of what you term "monopoly pricing."

Face it. Art costs money. Records don't make themselves. Movies require actors, producers, directors and many others. The reason why the marketplace standardized on a certain price is because that's the price that seemed to balance the costs to deliver something of a certain quality with what the market was willing to pay. That's called a "free market", not a monopoly.

As long as I've been alive, there have been small movie studios, small record labels, small publishing houses etc. None of them were ever shut down because someone said that they weren't allowed to create because there was a monopoly given to someone else. They usually failed-- if they failed-- because the market wasn't that interested in what they had to produce.

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It's hard to compete when you don't believe the market sets the price

A normal market sets a price. When piracy is the dominant part of a "market", normal market forces no longer apply.

It really doesn't matter what they reduce the price to, people here have proven that even a very low cost song or movie still isn't attractive compared to a pirated download. The guy above, example, is paying 60 euros to download. If he downloads 1 movie per day, he is paying 22 cents US a piece. If he doubles that download rate (adding in maybe music and tv shows as well), he is down to 11 cents. Remove the costs of the download, maintaining servers, transit, etc... and there isn't a ton of money left to play with.

There certainly isn't any money to make content with.

You cannot compete with free, especially when it's your own product you are competing with.

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Not at all. The TV market is decoupled and priced independently of content.

Right. The TV is the tool using the content. Priced independent of the content. Megaupload is also just a tool to upload and download files. Why is it different and why should Megaupload give their profits to the content owners?

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You misunderstand how the market works. The TV producers don't need to package their shows in a way that the average TV will be able to understand, but they do. Why? Because they make enough money on the ads to make it worthwhile. THey don't need to demand anything from the TV manufacturers and they don't.

Now they could take the path of creating a proprietary device and maybe distributing the content without ads-- something HBO does-- but they don't need to do that.

Companies do this all the time. It has nothing to do with rationalizing how it's all okay to make as many copies as you want.

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THey don't need to demand anything from the TV manufacturers and they don't.

Ok, so I ask again, where is the line between something being a tool to consume content and something that infringes the content owner's right? By your argument, it only becomes infringing when the content owner decides they want more money. That's a pretty arbitrary line.

It has nothing to do with rationalizing how it's all okay to make as many copies as you want.

I'm not rationalizing that at all, I am merely curious as to where you think this line is and who gets to define it.

"Anyone who thinks that won't be abused hasn't been paying attention."

The FCC's ability to regulate public airwaves won't be abused. They will ensure adequate competition so that dissenting views can be heard. Same thing goes with govt imposed cableco monopolies. IP criticisms are always allowed on these communication channels.

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Rremember, that was the whole pretext that the FCC gave to alleviate the injustice of allowing the government to deny us the ability to freely transmit information over public airwaves. That they will ensure a minimal amount of competition to ensure a diversity of viewpoints so that everyone can be heard. Look how that turned out. A hand full of entities now control most of the public airwaves and dissenting views don't make it onto public airwaves. Only pro big corporate views, ie: only pro IP views. Don't be fooled into thinking that this is any different. The whole objective is censorship, just like the objective with creating the FCC was censorship, and it worked. If this weren't so, the governments first order of business would be to correct to broken system that results in censorship outside the Internet. But they aren't doing that, instead, all of their efforts are focused on censoring the Internet. The public interest is not even a consideration, never was.

To say that the government's attempted Internet regulations won't result in censorship (or that they're not intended to) is similar to saying the government/FCC will take steps to ensure that censorship doesn't occur over public airwaves as a result of their regulation (and they pretended to do by initially requiring a minimal amount of competition). The reality is that this is false, censorship does occur over public airwaves (and cableco infrastructure) exactly because government regulations intentionally make it so. There is absolutely no reason for me to believe that the government's attempts to regulate the Internet aren't intended to result in censorship, if this weren't the case, the government would seek to correct the system they are responsible for that results in censorship outside the Internet. But they aren't lifting a finger to do that, only to regulate the Internet.

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(and the result of this censorship is outrageous copy'right' laws like insane lengths and insane infringement punishments that far exceed the punishments for fraudulently claiming copy'right' control over content that you don't really control. This censorship does have negative consequences to our society).

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In some ways, Pallente's right. You can starve off some number of the players by cutting off the money.

It's not going to be "win the war" strategy though.

There are enough of them that aren't in it for the money, and there are other ways of getting money that they will not be able to cut off. The demand is strong enough that they keep mutating and popping up somewhere else whenever one goes down.

Until the industry releases a quality product at a competetive price, these other tactics will have some small "successes" but ultimately won't have any major, lasting effect.

When "pirates" are not out to make money, it is hard to compete with them. I know that I would rather pay a few extra dollars to get good content legally, but not everyone is like me.

One thing that absolutely has to change is DRM. I can think of at least 10 movies/games that I've had to illegally download because my legal copy failed to work due to faulty DRM. One game was from EA. I contacted them about the problem, and they tried to accuse me of violating the user agreement, when I absolutely had not. I was as nice and respectful as one person can possibly be, and it got me no where. Why would I give them anymore of my hard earned money??

Anyway, I just think it's really sad that we have such amazing technology to deliver content to so many devices in so many places... and it's all crippled because some idiotic executives think they can make more money by screwing over their customers. This is why piracy will go away.

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When "pirates" are not out to make money, it is hard to compete with them. I know that I would rather pay a few extra dollars to get good content legally, but not everyone is like me.

Doesn't really matter because:
A/ The question is not "would you rather buy it legally?" but instead "does it offer value for money?" with value being a personal calculation that can include ease of access, price, ease of use, legality and a host of other value adds and that includes your DRM gripe, which is valid, as well as "competing with free".

B/ The question is also not "How do I get everyone [who receives the content] to buy it?", but instead "How do I get enough people to buy it to turn a profit, and what price do I set to maximise that profit versus people willing to pay the price?". And again that's a question of offering value.

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"I know that I would rather pay a few extra dollars to get good content legally, but not everyone is like me. "

I think most people would. There are things that I will download to see if I want to buy it. If I like it I go buy it, if not, I wont and it gets removed from everything I own.

I have also had this issue with CDs I own cracking and such during moves (I tend to move a good deal) I don't worry because I have now digital copies from either before or after (I still hold onto the cracked CDs) There is no reason for me to buy and rebuy content I already own.

Rationalization rarely makes sense. Mix that with a belief system "piracy is the cause of all our problems" and things get out of hand. These people have never been businessmen they have been a monoply and there is a distinct difference. Monopolies when faced with competition place blame, normally using a single "Cause".

The cause in this case should be the internet, not piracy. But they can believe they are fighting the good fight with piracy, they can't fight the internet or telcom.

Keep in mind one other thing about DRM

Any system which implements DRM is already compromised. It is quite impossible to secure. And given what we've seen vis-a-vis the consequences of insecurable systems, it's irresponsible of any vendor to be shoving more on the market.

It's not censorship

Censorship is when the state says that you can't express yourself. It's not when the state says you can't repeat someone else's opinions.

You should quit defending the lazy couch potatoes who are too cheap to spend 99 cents on some content. There are very real battles over censorship being fought in the US and in countries throughout the world. For instance, is it fair what's happening to Bradley Manning?

Don't lump these real first amendment defenders together the lazy, good-for-nothing goobers who are just stuffing their fat faces with potato chips while overloading the local cable loop with endless downloads of digital files that they'll probably never consume.

Re: This is much bigger than Hollywood.

Free speech is about you having your say, it's not about making a copy of some Hollywood movie. It would be very simple to (1) enforce a very draconian DRM policy that locked down video throughout America and (2) let every America talk as much as they want about whatever they want. The two have nothing to do with each other.

The only reason this is an issue is that losers like to pretend that stealing a free copy of a movie is somehow in the same league as the work of Martin Luther King, Peter Zenger and many others. It's an insult to everyone who's defended our rights to petition the government for redress to stretch the topic to somehow include some fat, lazy slob who's too cheap to spend 99 cents to support hard working men and women.

Okay, scratch that. Some of them are like Dire Straights who got their money for next to nothing and their chicks for free. But still they did something. They actually contributed something.

Re: Re: This is much bigger than Hollywood.

The only reason this is an issue is that losers like to pretend that stealing a free copy of a movie is somehow in the same league as the work of Martin Luther King,

No Bob, no. It's an issue when the content owners believe that someone sharing a movie somehow gives them the right to restrict our rights. Thinking that the latest Hollywood movie is somehow more important than our rights of due process, or free speech or privacy is idiotic and not to tolerated by any sane person.

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Right to due process? Gosh, it seems like the courts are more than happy to bend over backwards to protect people's rights.

You should take a look at how the law treats people accused of things like letting a parking meter expire. The law forces everyone to attach a tracking device to their car ("license plate") and then it refuses to allow you to register that car if there are unpaid tickets. Ever try to contest a traffic ticket? 99% of the people I know come away complaining that the system is stacked against them.

Repeat after me: taking someone else's work is not a right. Taking someone else's property is not a right. This has nothing to do with you speaking your mind, petitioning Congress for the redress of grievances, or just sharing your opinion with the world. Those are rights.

Re: Re: Re: Re: This is much bigger than Hollywood.

Bob,

This crowd can't be reasoned with. If they don't get whatever they want whenever they want it, it's censorship. Mike and his band of idiots are abusing the word "censorship." That much is obviously true. Trying to explain that to them will get you nowhere fast. You might as well just hit yourself in the head with a hammer rather than try to have a rational discussion with the Techdirt Mafia.

Re: Re: Re: Re: Re: Re: Re: This is much bigger than Hollywood.

You mean the organizations that create content so good you guys will do anything to pirate it? Yeah, those guys are terrible. We should just take whatever we want from them.

Um..I don't pirate it. I barely even consume it. Sometimes, when it comes out on ShowTime or whatever, but for the most part I could care less about the stuff coming out of Hollywood these days and I am certainly not going to spend my hard earned money on it beyond my monthly cable bill.

I have replaced some of my older music purchases because the containers failed (stretched cassettes, cracked CD's), but nothing created within the last 10 years (seriously, if you can't make a profit on your content in 10 years, you are doing something wrong). Even that was because I was interested in learning the P2P technology more than anything else.

Re: Re: Re: Re: This is much bigger than Hollywood.

Repeat after me: taking someone else's work is not a right. Taking someone else's property is not a right.

I never said either of those were rights. Nor are they even morally correct.

This has nothing to do with you speaking your mind, petitioning Congress for the redress of grievances, or just sharing your opinion with the world. Those are rights.

If you believe, even for a moment, that the actions being taken now on the behalf of the content owners won't be pushed further and further and in the process eroding our fundamental rights to things like due process, innocent until proven guilty, free speech and privacy, then you are simply plumb dumb.

The legacy gatekeepers want the Internet controlled so they can continue their one-way hype and spin to create markets for their products. The government wants the Internet controlled so they can have their one-way propaganda machine, like the old days with their lag dog mainstream media outlets. Unfortunately for them, the citizens have tasted real freedom of speech and information and that Genie will never be put back into that bottle. Sorry.

Re: It's not censorship

"You should quit defending the lazy couch potatoes who are too cheap to spend 99 cents on some content."

It is unethical for a legal system to restrict others from copying. There is absolutely nothing wrong with copying others and I absolutely should oppose a legal system that implements unethical laws with no justification.

The justification for Copy'right' should be that it promotes the progress. IP is doing no such thing and so it is not justified. Instead, it's being used to help exploit both the public and artists so that the lazy middlemen record labels can make money for adding nothing of value that doesn't exist without their absence. Opposing IP injustice is every citizens duty.

Re: Re: It's not censorship

Sure. Sorry, but the artists are in on the game. They know that the evil middlemen won't have any money to pay them without copyright. The artists create the copyright and then they sell it to the middlemen.

And really. You're exploited because some store charges too much for a DVD? Get real. You don't have to buy it. You can watch public domain cat videos on YouTube all night if you like. But if you want someone to create a big budget movie for your entertainment, you better arrange to give them some money to encourage them by helping them pay for a house and some food and some medical care.

"Castro went to ridiculous extremes, suggesting that the government needs to blatantly censor the web through a "blacklist" filter that ISPs and search engines would be required to block. Anyone who thinks that won't be abused hasn't been paying attention."

Try reading that sentence on its own. It's scary when you can mistake your own government for a genuine Communist dictatorship without even watching Fox.

I don't really care that much what the industry says, I'm not buying, renting or leasing anything from those creeps ever, my money my rules, besides I don't really need them, Jamendo is good enough for me and it is free, Gutenberg have tones of good books to read for free and I can even use those to make something out of it, Archive.org have tones of videos, sounds, music and etc, also a lot of talented people is starting to make free content and by free I mean free as in freedom not in free beer.

The only ones I expect to starve are the big labels and studios, those people will never see a dime from me, no matter what they say or do.

Re: closing tag

Excellent

I especially like the idea for the creation of secret blacklists, which ISPs would be legally required to censor, and which the public would not have access to. I can't think of any constitutional provisions or 1st Amendment precedent that would violate. And even if there are some nutty people out there who think this seems more reminiscent of Stalin than the USA, I have only one word for them and it trumps all other concerns:

Eric F. Vermote

Eric F. Vermote illegally used P2P in Maryland during 2003-2004 (bootlegs & audio files for his car). This man with a IT degree works for NASA & the University of Maryland but went to jail for automobile theft in Florida... he is definitely not at all scrupulous with music too obviously and filed a defamation legal suit in France against me in July 2009 stipulating he never got involved in on-line piracy because he is a manipulative liar & because the case involved never got officially substantiated or couldn't ever be substantiated; my point is that if the Internet had been better regulated by the US government Eric F. Vermote would not have had the opportunity to lie against me and pretend what I accused him of (on-line piracy) is frivolous. On-line piracy cases almost absolutely never get substantiated unfortunately! Damien Bizeau - Classical Music, France.